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Last month, we published a story on how AMD may have shifted its focus from Bulldozer to Bobcat in the wake of the former’s disappointing performance. Since it ran, we’ve spoken to multiple independent sources that told us AMD’s 28nm Brazos-based APUs were in serious trouble and would likely never see the light of day. AMD reportedly finalized the decision to cancel both products right around the time it fired most of its PR and marketing divisions. Sunnyvale will likely announce a new set of 28nm APUs at its Financial Analyst Day in February. Unlike the failed Krishna/Wichita designs, the new chips will be manufactured by TSMC.

The implications and financial repercussions could be enormous. Moving 28nm APUs from GlobalFoundries to TSMC means scrapping the existing designs and laying out new parts using gate-last rather than gate-first manufacturing. AMD may try to mitigate the damage by doing a straightforward 28nm die shrink of existing Ontario/Zacate products. While the resulting chips wouldn’t incorporate any of the architectural improvements originally intended for Krishna/Wichita, they’d lower Brazos’ power consumption and buy time for a new processor.

There’s no easy way to yank Krishna and Wichita out of AMD’s product lineup

If AMD goes this route, it might be able to launch a 28nm APU in 2012, but a true 28nm replacement for Krishna/Wichita is likely at least 18 months away. Without the GF-designed APUs, AMD will have no choice but to flog 40nm Brazos parts while Intel and ARM break into new markets and debut chips built on more advanced technologies.

The momentum AMD built for itself through 2011 is on the verge of stalling out. Trinity, the Bulldozer-based successor to Llano, will reportedly deliver strong GPU performance and a better CPU-GPU interconnect but AMD will be doing well to match Llano’s performance-per-watt ratio, much less exceed it. Furthermore, Llano itself benefited from a significant halo effect; it was viewed as the first iteration of a design philosophy whose performance Bulldozer would significantly improve.

AMD and GlobalFoundries: The bloom is off the rose

AMD’s decision to shift production from GloFo over to TSMC, while dramatic, is the latest in a long chain of events that point towards increasingly frosty relations between the once unified companies. In its Q3 call, AMD noted that “we no longer have the right to designate a representative to the GlobalFoundries’ Board of Directors” as its share of GlobalFoundries had decreased to 9.6 percent. In June, GlobalFoundries fired CEO Doug Grose (formerly AMD’s VP of manufacturing) and replaced him with Ajit Manocha, whose most recent executive experience was at Spansion, AMD’s red-headed, unmourned, and unprofitable memory spinoff.

Multiple GF executives have left the company in the past year and one of the casualties of AMD’s bloodletting last month was John Bruno, the chief architect behind Trinity. In 2009, GF officers confidently talked up their intent to win AMD’s discrete GPU business at 28nm. Today, AMD’s 28nm GPUs are all being built at TSMC.

AMD reportedly cancelled Krishna/Wichita when it became clear that GlobalFoundries wouldn’t be able to ramp the parts at volume and was unwilling to negotiate a new wafer agreement. Right now, AMD only pays GF for good 32nm dies, which means GlobalFoundries has been stuck building Llano at a loss for most of this past year. That agreement expires on January 1, at which point Sunnyvale goes back to paying a flat fee per wafer.

AMD doesn’t want to pay a per-wafer fee for a slow, low-yield product ramp, while GlobalFoundries is stuck with product lines dedicated to 32nm SOI production for a company with decidedly uncompetitive products. Llano performed well but was difficult to ship in volume, while Bulldozer scaled much more easily but was re-spun multiple times in an attempt to improve performance. From GF’s perspective, it took significant pains to ensure that AMD’s Bulldozer was ready for prime time — and AMD returned the favor by designing an architectural atrocity.

The two companies will continue to collaborate on AMD’s main product lines — neither has a choice — but the warm fuzzies are at an all time low.

The widening gyre

Rory Read’s decision to gut AMD’s marketing and PR departments makes a lot more sense given what we know now, even if the dismissal of individuals like Bruno and Killebrew still leaves us scratching our heads. Slashing these departments frees up funds for immediate investment into ramping a 28nm APU at TSMC. It’s a desperate Hail Mary — and a watershed moment for the company. Instead of focusing on AMD’s historic core markets, Read is doubling down on Bobcat.

Will it work? We’re dubious. Trinity should be strong enough to anchor AMD’s mainstream notebook parts through 2012, but this cancellation leaves AMD without a new ultra low-power product family at a time when its competitors are heavily focused on providing such solutions. The company’s ability to launch tablet parts or hold the ground it gained in netbooks is very much in question. At the upper end of its product stack, AMD needs a Bulldozer core that delivers the power efficiency and performance the company originally promised, but there’s no such chip on the horizon.

Read is betting that the incremental 10-15% improvements the company plans to deliver to Bulldozer will be enough to keep the chip attractive to OEMs and end users. It’s a huge gamble — but it’s probably AMD’s last chance to establish itself as anything other than a cheap alternative for x86 processors. Intel’s lead time on process technology deployments has grown every year — if AMD doesn’t field something competitive in the next 24 months, the gulf between the two may grow too wide to leap.

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Anonymous

” if AMD doesn’t field something competitive in the next 24 months, the gulf between the two may grow too wide to leap.”
No mention of the third competitor regularly forgotten ( ARM’ A15 chip)
compatible with windows 8
directx 11 api
and targeting the server market
way cheaper
uses way less power

ARM won’t have DX11 until 2013. I’d like to know what they’re doing at GF.

RoOo7 El5ayl

that’s when they appoint a jacka$$ that rarely knows a think about IT as a CEO for the world best arab global investment history & expect things to go well, i’m talking about ATIC owning 66% of GloFo and their CEO ibrahim al ajami.. experience is key here, they should hire someone with real experience & background that truly supports it as well as the connections of the major global players. they r all monopolizing everything, yet we still think that AMD can win, i doubt it can.. until it gets at least a loan that is 3 or 4 times it’s current worth & then they will definitly be able to gain real market share from intel.. till then they r just blowing in a blown bag. i wish i’m wrong, yet i love AMD like i love my family. my 1st x86 was an intel Pentium 233Mhz & i hated it.. my 2nd was AMD K6-2 266Mhz & since then i’ve been in love, never looked back & will this day i refuse to use an intel pc. that’s when Bill Sanders was CEO, that’s the sort of caliber they should get, or just get him back if he’s willing. do i make sense here?

http://pulse.yahoo.com/_EKNZKJ5LBTYYEUH4NCSPTGFGGE Eric

Realllllly?

I buy what gets the job done… simple as that.

Sometimes it’s Intel, and sometimes AMD…

My current newest laptop is powered by AMD, and I am happy it CAN play Skyrim… though my next Laptop WILL be Intel powered and will play Skyrim MUCH better. That said, I also encode video every week, as part of my job.

I deal with compressed files a few times a month…

Currently AMD is falling way behind in CPU’s…

More and more laptops can have discreet GPU’s installed, so my next laptop’s CPU will be an Intel for sure, though the GPU will undoubtedly be an AMD powered one.

I could never be a fanboi to any of these companies…

http://twitter.com/technegro Techngro

I always said that when I build my first PC, it would be AMD hands-down. Well, now i’m in the final stages of planning my first build and, sadly, it’s most likely gonna be an Intel rig. The newer Sandy Bridge procs just blow anything AMD has away. I can’t justify spending a little bit less money for a lot less performance.

But I do hope AMD gets their stuff together. I always root for the underdog.

RoOo7 El5ayl

don’t. get an AMD bulldozer platform, it makes a whole lot of difference in responsiveness & doesn’t break your bank.. let me know if u still would like to choose the specs. i just got two workstation machines approved for work & they were about $3,500 but an intel one with almost the same specs & performance around $5,500 for both.

Joel Hruska

That’s a joke. A bad one.

If you care about performance, don’t build AMD. Especially not for a workstation or server.

Anonymous

Looks like the monopolist strategy of capping off AMD’s revenues and thus causing AMD to sell of their factories is working well.

Why I would NEVER buy anything from those crooks. Anti-Trust and lowlife tactics.

Bialar Crais

I hope you will be enjoying AMD’s transformation into the new VIA. LOL!!!

http://pulse.yahoo.com/_J72ZWG3MJYIVYWPREPKY55AWDY deana

I have always thought that in terms of r&d, but losing the factories clearly hurts now.

Intel will always have an asterisk next to their success over AMD. Back in the 90’s I remember being proud when I bought my first Pentium ‘Intel inside’ board. It’s sad. So no, I don’t buy Intel anymore either.

MicroBuntu

Can you really blame Intel for having a superior product? It’s AMD’s own fault they’re falling so far behind. BD was a flop, and with Llanos/Fusion/APU, AMD is really on to something for low power, budget performance. Now if they have another BD fiasco with teh APUs that’s their own doing.

How does Intel have a monopoly? There’s ARM. And further, how does that even apply here? “Oh, AMD is moving their fabrication business, Intel must be doing something sneaky” STFU.

And yes, my loyalties lie with whoever gives me the best performance.

http://profiles.google.com/x3rox.77 Oliver Pope

ARM and intel are in two different markets at the moment, AMD is their only real competitor in regards to mobile, desktop and server CPUs. ARM will eventually start to compete with intel, mainly in the server space, due their high performance per watt.

Though I do also see intel snagging some of the smartphone CPU/SoC market from ARM as well once their CPUs are of low enough wattage.

Joel Hruska

You don’t appear to be aware of the long-term history of relations between AMD and Intel or the substantiated allegations of predatory rebate practices.

ARM and Intel have never competed before right now. AMD is the reason Intel hasn’t exercised a monopoly in the consumer PC market for the past decade.

MicroBuntu

Can you really blame Intel for having a superior product? It’s AMD’s own fault they’re falling so far behind. BD was a flop, and with Llanos/Fusion/APU, AMD is really on to something for low power, budget performance. Now if they have another BD fiasco with teh APUs that’s their own doing.

How does Intel have a monopoly? There’s ARM. And further, how does that even apply here? “Oh, AMD is moving their fabrication business, Intel must be doing something sneaky” STFU.

And yes, my loyalties lie with whoever gives me the best performance.

Anonymous

Intel simply has a better part. Take away any foundry advantage and AMD still isn’t even in the game. They are half a decade behind and the gap keeps growing.

http://twitter.com/Dresdenboy Matthias Waldhauer

TSMC was named 28nm partner for AMD’s 28nm APUs back in June:

“TSMC will also be AMD’s major foundry partner for the 28nm Krishna and
Wichita accelerated processing units (APUs), with volume production set
to begin in the first half of 2012, the report said.”

At the time, AMD/GF’s response on stories like that was “Didn’t we clarify this back in November?”

Wakeupsir

glofo should have never agreed to make amd bulldozer cpu (it was a very bad design), as it clearly set glofo back on 28nm by half a year min…now amd turns around and stabs glofo in the back by going to tsmc….

i don’t see amd getting any favours in the future from glofo

Joel Hruska

Wakeupsir,

GloFo’s continuing to manufacture AMD’s core products was an anchor of the original spinoff. AMD’s manufacturing and engineering teams formed the core of GlobalFoundries’ business.

Your negativity made this read VERY PAINFUL. Journalists are impartial and use words as such. Go back to school.

http://www.mrseb.co.uk Sebastian Anthony

If you are looking for journalism, I suggest you read a newspaper, or check out a newspaper’s website (but even there, a lot of the content is now more blog-like).

Joel Hruska

Sebastian doesn’t speak for me in this, at all. I consider myself a journalist and neither write to a lower standard nor approve of the use of such to condone what typically passes for “blogging.”

That said, yes, this piece uses strong descriptors in places. They are used at points where appropriate to convey the significance of the company’s problems *and*, in Bulldozer’s case, the perception at GF that they invested in being able to build a product that AMD isn’t going to be able to easily sell.

After more than a decade of covering AMD in the desktop, workstation, and server industries, I believe it’s fair — and accurate — to say that the company’s ability to meaningfully compete with Intel in the future has never been more uncertain. My use of the phrase “meaningfully compete” is deliberate. Do I think AMD can make a profit as a low-end, second-source x86 alternative? Probably, yes. But the company spent the last 10 years fighting against being limited to such a role. Even the GF spinoff was sold to investors and the public as being the best chance for avoiding such marginalization.

Cancelling Krishna/Wichita leaves a gaping hole in AMD’s product line and is a problem. Emphasizing the scope of that problem is different from bashing AMD over its repeated failure to deliver competitive products.

Joel Hruska

Sebastian doesn’t speak for me in this, at all. I consider myself a journalist and neither write to a lower standard nor approve of the use of such to condone what typically passes for “blogging.”

That said, yes, this piece uses strong descriptors in places. They are used at points where appropriate to convey the significance of the company’s problems *and*, in Bulldozer’s case, the perception at GF that they invested in being able to build a product that AMD isn’t going to be able to easily sell.

After more than a decade of covering AMD in the desktop, workstation, and server industries, I believe it’s fair — and accurate — to say that the company’s ability to meaningfully compete with Intel in the future has never been more uncertain. My use of the phrase “meaningfully compete” is deliberate. Do I think AMD can make a profit as a low-end, second-source x86 alternative? Probably, yes. But the company spent the last 10 years fighting against being limited to such a role. Even the GF spinoff was sold to investors and the public as being the best chance for avoiding such marginalization.

Cancelling Krishna/Wichita leaves a gaping hole in AMD’s product line and is a problem. Emphasizing the scope of that problem is different from bashing AMD over its repeated failure to deliver competitive products.

RoOo7 El5ayl

but it’s reality check & will always be like this.. i’m a very optimistic person, after reading couple of stories in the past few days my head is been going a bit left & right. again i would say as long as AD is backing them up, they will still pull through even if the next 5 year are shit 4 them.. that’s what AMD is good at, go back in history & read when they 1st released athlon & what’s been going on with them & their profits.. but the biggest disappointment was when they announced that Intel is only gonna pay AMD $1.4Bn for the antitrust dispute! i thought it would be at least sth like $15Bn~$20Bn. but it’s all politics & who is gonna serve me best. that’s how the world is.

Joel Hruska

You don’t understand the underlying issues, technology, or difficulty of what you’re stating.

1) AMD settled with Intel because it wanted a renegotiated x86 license. That *license* is the reason it’s been able to cut its share of GlobalFoundries to less than 10%. In the old days, AMD was required to maintain a much higher percentage of ownership under its own manufacturing facilities.

2) Even a larger payment — $4-5 billion — wouldn’t have actually fixed anything. You can’t magically bring chip foundries online just because you have the money to pay for it. Chip designs take time. Foundry ramps take time.

3) “they have 2 & they will.”

That’s what folks said about Phenom when Core 2 came out. Phenom didn’t. Phenom II fixed Phenom, but did little more. After four years, Bulldozer was the big “they have to and they will.”

It didn’t, either.

You can’t substitute wishful thinking for factual performance. The entire spinoff and the license negotiation were Big Factors supposed to make a difference. Bulldozer was supposed to make a difference. AMD isn’t fighting to remain competitive anymore, they’re fighting to remain *relevant.*

There are plenty of irrelevant, profitable CPU designers. Until the last couple years, ARM labored in obscurity. Zilog is still alive and kicking. The vast majority of the world’s microprocessors do their jobs without anyone wondering who manufactured them or even noticing they exist.

AMD is on the verge of going that route, willingly or not.

Anonymous

Long story short, AMD settled for pocket change because they were beggars on the street looking for money to keep the lights on.

roebling

Well written story. I just hope AMD works out the problems quickly. They’ve been a great and reliable partner.

http://twitter.com/sykobee Graham Briggs

But AMD was always going to use TSMC for 28nm APUs: http://pcper.com/news/General-Tech/TSMC-gets-AMDs-28nm-APU-business

It just looks like they’ve dropped GF as an alternative supplier.

Joel Hruska

To the best of my knowledge, no they weren’t. DigiTimes started publishing reports from Chinese news sources claiming that AMD would use TSMC in November, 2010. Everyone at AMD and GF categorically denied these claims. Everyone I spoke to is *still* adamant that AMD had no plans to use TSMC for future APUs as of a year ago.

AMD had *not* decided to cancel Krishna/Wichita when that PCPerspective story was published. The same Chinese publication ran with the same rumor that had previously been debunked.

The entire concept of using GF as a ‘second supplier’ makes no sense given the difference between gate-first and gate-last. AMD would have had to do two entirely separate tape-outs, one for each company.

Is a good example. Intel’s dual-core i3-2100 is a better deal and offers better performance than AMD’s equivalent Llano. Meanwhile the FX-8150 is still priced at $269 at NewEgg, while offering the performance of a $189 Thuban.

AMD doesn’t have a price/performance advantage anymore.

Anonymous

I always thought that selling the German fab was a bad idea.

Anonymous

well if something not working out for 10 years it about time they make some changes. If GF is a problem then go to the solution which is TSMC to make a price and performance matter again. if GF is a headache, forget them. i dont know how reliable TSMC is, even if they planning on doing 28nm?

Anonymous

The author knows his stuff. AMD will suffer an irrecoverable hit because of this. The ship is sinking faster than most realize. You have a company already in it’s darkest hours staring down a path where a whole generation of parts planned to be built on GloFo 28nm are going to be cancelled. Wichita is first and wait and see the rest follow suit. There is a server and big Fusion as well. Problem is, you can’t port the designs anywhere else in a reasonable amount of time and the new Bulldozer design is a monumental failure to begin with. Meanwhile you have a new CEO who orders a set of layoffs but he fails to change any of the guards. They get rid of a bunch of people, who are in no way responsible for the current state of the company and some of which have stellar track records (mentioned above). They needed to get rid of the people responsible for Bulldozer, people like Sam Nafziger and Dina McKinney. One is a washed up Itanium engineer (need I say more) and the other was responsible for past atrocities like Griffin. Does any of this come as a surprise? Then you have Chekib Akrout who looks after the relationship with the foundry and CPU core development. The two biggest reasons why the company is a complete failure. In classic AMD style they will promote this guy for all his failures. This is the mess the CEO should have cleaned up, but then again, AMD never really got a new CEO. They got a middle class executive that likes to fist pump on stage.

Joel Hruska

Javian,

I’m not willing to finger point as specifically as you are. There are two main reasons why.

First, we don’t know anything about what AMD knew regarding BD, when they knew it, and whose fault it actually was. Meyer signed off on BD, and Meyer was an engineer. Clearly he did so because he believed the part was viable.

Second, firing people for making mistakes — even big mistakes — isn’t always a good idea. AMD works in a highly competitive, highly specialized field. There’s no quick way to secure necessary talent and the number of people with experience in designing x86 chips is limited.

Firing highly placed people disrupts teams and creates confusion. It’s not a fix. And being an Itanium engineer is not automatic proof of anything. Even if the engineer in question was the chief architect of IA-64, he’s still beholden to a corporate structure that told him what it wanted and how it wanted the chip to look. If he *wasn’t* the chief architect, he’s working on a product to improve it, not responsible for its shortcomings.

Anonymous

Wake up man. I can see how Meyer would have signed off on what Bulldozer was promised to be. And that’s the main point here, what the Bulldozer architects promised and what they delivered are two completely different things. This goes right back to those people I mentioned. Straight away, the failure of the company can be traced right to them. If the CPU was even anywhere near as good as they promised the company wouldn’t be on the brink right now.

In terms of firing people, AMD has no problem doing that. The only problem is, they fire the wrong people as can be clearly seen by their performance as a company. Instead of firing the people who make mistakes, they fire other people to try and show the street they are doing something. This only works for a limited amount of time. At the end of the day you need to deliver on something that makes money and excuses and CEO changes and all the other bullshit only goes so far.

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